Carfax Report: How to read it

A CarFax report is basically a “background check” for a car or truck. Every vehicle has a unique vehicle identification number, or VIN, that is like a serial number. Many government agencies, as well as private businesses, like oil change centers, record information in their records and tie it back to the VIN. A carfax report is something that gathers all of that information together….everything from the cars title history, ownership and sales information, oil changes, insurance claims, etc.

A single CarFax report costs around $25, but a a 30-day unlimited account is available for just a little more…right around $30. Since the 30-day account is only a little more, there’s no real reason to buy a single report. With the unlimited account, you can pull reports for any VIN you want, and they come back instantly.

Although many, many consumer purchase CarFax reports, they don’t all use them to their full advantage. Knowing how to read the report will ensure that you are getting your money’s worth for the report:

Double Check the VIN

The VIN

Double check the vehicle identification number (VIN). It is located under the windshield on the driver’s side. Getting this correct is crucial to ensure that you are pulling the correct history report.

Standard Equipment/Safety Options:

This information can sometimes be useful to check that the car has it’s original options, and has not been rebuilt. For example, if the car came standard with a CD changer, and there’s a single CD player in the car ( not a changer ), that can be a clue that something unusual may have happened to the car.

CarFax Safety and Reliability Report

This information isn’t about this specific car, but rather historical safety and reliability information for this model of car. This can be helpful to determine if you’ve chosen the right model of car to purchase.

Safety information that’s included:

NHTSA Crash Test Results

IIHS Crash Test Results and Low Speed Damage Repair

HLDI Injury, Collision, & Theft

NHTSA Safety Recalls

Reliability information included:

J.D. Power and Associates Ratings

Identifix Reliability Ratings

Information on Original Manufacturer’s Warranty

Various Awards the model may have won

Ownership History: This is one of the most important sections, and fills you in on some really key information:

Owner Type: Was it a former rental car or fleet vehicle? This can be both good and bad. Fleet and rental vehicles get very regular maintenance, which is great, but they are also not always treated well by their drivers.

Car has moved across states: Excessive movement could be an indicator that someone has moved the car to a state that is less stringent about reporting salvage titles.

Odometer Readings: Carfax will flag any situation where the mileage appears to have gone backwards over time…could indicate an attempt to “roll back” the odometer and make the car appear to have less miles on it than it really does.

Title Issues:

Salvage Title Example

Salvage: This is a vehicle that has been damaged to the point where it is worth less than 25 percent of it’s market value. There is one class of Salvage title, however, that may not be a huge issue. Several states report theft recoveries as “Salvage Events” on the title. Even if the car suffered no damage, the title can get marked in this way. Carfax does attempt to annotate these kinds of situations in the report.

Junk: Very similar to a salvage title. Many states use this type of title to denote a vehicle is not safe to be driven. Avoid purchasing a vehicle if the title history says “Junk” anywhere.

Rebuilt and/or Reconstructed: This is typically a car that’s been in a major accident, and repaired extensively. If you are comfortable buying a car with this kind of history, do not pay blue book prices for it. Cars with rebuilt titles typically sell for much, much less than an identical car without title issues. Do consider safety, as most of these cars are rebuilt with 3rd party parts. Additionally, most of the air bags usually deploy in an accident. Do you trust that the rebuilder put the safety airbags back to full working order?

Fire/Flood: Avoid this kind of title. Fire and Flood vehicles typically have issues with electrical systems, mysterious smells, or other hard to diagnose problems. Even if the price is spectacular, it’s not usually worth the potential trouble.

Hail Damage: Hail damage doesn’t usually create any associated mechanical issues…it’s almost always a purely cosmetic problem. If the body repairs were done correctly, you can often get a great deal on a former hail damaged car. Be sure to have a mechanic and body shop inspect the car before you buy it.

Not Actual Mileage: Steer clear of this one. This could mean the seller has stated that the odometer reading does not match the true mileage on the vehicle. It could be something innocuous, like the failure and replacement of an odometer, but it could mean the odometer was tampered with.

Exceeds Mechanical Limit: Not an issue at all. This just means that the vehicle has more miles than the odometer can display…many states label cars with this annotation after 100,000 miles, even if the odometer has more than six digits. The mileage itself may be an issue for you, but this annotation really doesn’t hurt anything.

Odometer Rollback check: This is related to the last reported odometer mileage. Carfax sets this flag when it looks like there are conflicting reports about the actual mileage. It could turn out to be nothing…like perhaps one mechanic at an oil change station incorrectly recorded the values. But…be sure to find out what the issue is before you buy!

Total Loss Check: According to the experts at CarFax, not vehicles that have major damage receive a salvage title. Carfax uses insurance claim records to tag vehicles that potentially have clear title, but also have a large claim that exceeds 75% of the vehicle’s market value. If you see this mark…steer clear.

Frame Damage Check: Carfax puts this phrase in the report if there is actual, or suspected damage to the underlying frame or unibody in a car. At the very least, it indicates the car went in for extensive body repair. If your heart is set on buying the car, have a body shop check it out first.

Airbag Deployment Check: This one is a show stopper unless you have a real expert check out the car and verify that new airbags were installed correctly!

Accident Check: Many vehicles have been involved in accidents, and in fact, many of them in small parking lot skirmishes. This isn’t a show stopper, but make sure that a mechanic certified in auto body issues check the car thoroughly before you buy.

Manufacturer Recall Check: If there are active recalls for the vehicle, Carfax will note them. Don’t get overly concerned if there is a recall, but do make sure that the car has either been previously fixed in conjunction with the recall, or that you bring the car into the dealer to have the recall maintenance performed.

Basic Warranty Check: This is just a convenience note from Carfax…they check the year model of the car, the current date, and the length of the factory warranty, and let you know if the warranty has expired.

People should know that CarFax isn’t always 100% correct! Buyer beware, as there are still a ton of flood damaged, theft recovery, and other problematic vehicles with “good titles” out there. Get your car inspected by an independent mechanic before you buy.